<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 1, 1994
__________________
AMERICAN INDUSTRIAL PROPERTIES REIT
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
TEXAS 1-9016 75-6335572
(State or Other Jurisdiction) (Commission File Number) (I.R.S. Employer Identification
of Incorporation Number)
</TABLE>
6220 NORTH BELTLINE, SUITE 205, DALLAS, TEXAS 75063
(Address of Principal Executive Offices) (zip code)
Registrant's telephone number, including area code (214) 550-6053
<PAGE> 2
Item 5. Other Events
Pursuant to a unanimous written consent adopted by the Trust Managers
of the Registrant on February 1, 1994, the Trust Managers amended the Second
Amended and Restated By-Laws (the "By-Laws") of the Trust to add certain
limitations on transfer and ownership of the shares of beneficial interest (the
"Shares") of the Registrant so that the Registrant may maintain its status as a
real estate investment trust ("REIT") under the Internal Revenue Code (the
"Code"). The amendment adds the following provisions to the By-Laws:
ARTICLE XI
LIMITATIONS ON TRANSFER AND OWNERSHIP
11.1 Limitations on Transfer. The Shares (other than Excess
Shares) shall be freely transferable by the record owner thereof, subject to
the provisions of Section 11.2 hereof and provided that any purported
acquisition or transfer of Shares that would result in (a) the Common Shares
being owned directly or indirectly by fewer than 100 persons (determined
without reference to the rules of attribution under Section 544 of the Internal
Revenue Code of 1986, as amended (the "Code")) or (b) the Trust being "closely
held" within the meaning of Section 856(h) of the Code shall be void ab initio.
Subject to the provisions of Section 11.5 hereof, any purported transfer of
Shares that, if effective, would result in a violation of Section 11.2 hereof
(unless excepted from the application of such Section 11.2 pursuant to Section
11.6 hereof) shall be void ab initio as to the transfer of that number of
Shares that would otherwise be beneficially owned by a Shareholder in violation
of Section 11.2 hereof, the intended transferee of such Shares shall acquire no
rights therein and the transfer of such Shares will not be reflected on the
Trust's stock record books. For purposes of this Article XI, a "transfer" of
Shares shall mean any sale, transfer, gift, hypothecation, pledge, assignment
or other disposition, whether voluntary or involuntary, by operation of law or
otherwise.
11.2 Limitations on Ownership. Commencing on February 1, 1994,
except as provided by Section 11.6 hereof, no person shall at any time directly
or indirectly acquire or hold beneficial ownership of Shares with an aggregate
value in excess of 9.8% of the aggregate value of all outstanding Shares (the
"Ownership Limit").
For purposes of this Article XI, (a) the value of any Shares
shall be reasonably determined in the manner established by the Trust Managers
and (b) a person (which includes natural persons, corporations, trusts,
partnerships and other entities) shall be deemed to be the beneficial owner of
the Shares that such person (i) actually owns, (ii) constructively owns after
applying the rules of Section 544 of the Code, as modified in the case of a
REIT by Section 856(h) of the Code, and (iii) has the right to acquire upon
exercise of outstanding rights, options and warrants, and upon conversion of
any securities convertible into Shares, if any.
11.3 Shareholder Information. Each Shareholder shall, upon demand
of the Trust, disclose to the Trust in writing such information with respect to
his or its direct and indirect
2
<PAGE> 3
beneficial ownership of Shares as the Trust Managers in its discretion deems
necessary or appropriate in order that the Trust may fully comply with all
provisions of the Code relating to REITs and all regulations, rulings and cases
promulgated or decided thereunder (the "REIT Provisions") and to comply with
the requirements of any taxing authority or governmental agency. All persons
who have acquired or who hold, directly or indirectly, beneficial ownership of
Shares with an aggregate value in excess of 9.8% of the aggregate value of all
outstanding Shares must disclose in writing such ownership information to the
Trust no later than January 31 of each year.
11.4 Transferee Information. No later than the 50th day prior to
any transfer which, if effected, would result in the intended transferee owning
Shares in excess of the Ownership Limit, the intended transferee shall provide
to the Trust Managers an affidavit setting forth the number of Shares already
beneficially owned by such intended transferee. In addition, whenever the
Trust Managers deem it reasonably necessary to protect the tax status of the
Trust as a REIT under the REIT Provisions, the Trust Managers may require a
statement or affidavit from each Shareholder setting forth the number of Shares
beneficially owned by such Shareholder. Subject to the terms of Section 11.10
hereof, if, in the opinion of the Trust Managers, any proposed transfer may
jeopardize the qualification of the Trust as a REIT, the Trust Managers shall
have the right, but not the duty, to refuse to permit the transfer of such
Shares to the proposed transferee. All contracts for the sale or other
transfer of Shares shall be subject to this Section 11.4.
11.5 Excess Shares.
11.5.1 Creation of Excess Shares. If, notwithstanding the
other provisions contained in this Article XI, at any time after the
Effective Date there is a purported transfer of Shares or a change in
the capital structure of the Trust (including any redemption of Excess
Shares pursuant to subsection 11.5.7 hereof) such that any person
would beneficially own Shares in excess of the Ownership Limit
("Excess Shares") then, except as otherwise provided in Section 11.6
hereof, such Shares in excess of the Ownership Limit (rounded up to
the nearest whole Share), shall be automatically deemed an equal
number of Excess Shares.
11.5.2 Ownership in Trust. Upon any purported transfer of
Shares that results in Excess Shares pursuant to subsection 11.5.1
hereof, such Excess Shares shall be deemed to have been transferred to
the Trust, as trustee of a separate trust for the exclusive benefit of
the person or persons to whom such Excess Shares can ultimately be
transferred without violating the Ownership Limit. Shares of Excess
Shares so held in trust shall be issued and outstanding Shares of the
Trust under the Maryland General Corporation Law. The purported
transferee of Excess Shares shall have no rights in such Excess
Shares, except the right to designate a transferee of its interest in
the trust created under this subsection 11.5.2 upon the terms
specified in subsection 11.5.6 hereof. If any of the restrictions on
transfer set forth in this Article XI are determined to be void,
invalid or unenforceable by virtue of any legal decision, statute,
rule or regulation, then
3
<PAGE> 4
the intended transferee of any Excess Shares may be deemed, at the
option of the Trust, to have acted as an agent on behalf of the Trust
in acquiring the Excess Shares and to hold the Excess Shares on behalf
of the Trust.
11.5.3 Dividend Rights. Excess Shares shall not be entitled
to any dividends. Any dividend or distribution paid prior to the
discovery by the Trust that Shares have been deemed Excess Shares
shall be repaid to the Trust upon demand, and any dividend or
distribution declared but unpaid shall be rescinded as void ab initio
with respect to such Excess Shares.
11.5.4 Rights Upon Liquidation. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of, or
any distribution of the assets of, the Trust, each holder of Excess
Shares shall be entitled to receive, ratably with each other holder of
Common Shares or Excess Shares, that portion of the assets of the
Trust available for distribution to the holders of Excess Shares as
the number of Excess Shares held by such holder bears to the total
number of Shares and Excess Shares then outstanding. The Trust, as
the holder of all Excess Shares in one or more trusts, or, if the
Trust shall have been dissolved, any trustee appointed by the Trust
prior to its dissolution, shall distribute to each transferee of an
interest in such a trust pursuant to subsection 11.5.6 hereof, when
determined, any assets received in any liquidation, dissolution or
winding up of, or any distribution of the assets of, the Trust in
respect of the Excess Shares held in such trust and represented by the
trust interest transferred to such transferee.
11.5.5 Voting Rights. No Shareholder may vote any Excess
Shares. The Excess Shares will not be considered for purposes of any
Shareholder vote or for purposes of determining a quorum for such a
vote.
11.5.6 Restrictions on Transfer. Excess Shares shall not be
transferable. The purported transferee of any Shares that are deemed
Excess Shares pursuant to subsection 11.5.1 hereof (the "Initial
Transferee") may freely designate a transferee (the "Subsequent
Transferee") of the interest in the trust that represents such Excess
Shares, if (a) the Excess Shares held in the trust and represented by
the trust interest to be transferred would not be Excess Shares in the
hands of the Subsequent Transferee, and (b) the Initial Transferee
does not receive a price for the trust interest in excess of (i) the
price the Initial Transferee paid for the Shares in the purported
transfer of Shares that resulted in the Excess Shares represented by
the trust interest or (ii) if the Initial Transferee did not give
value for such Shares (e.g., the Shares were received through a gift,
devise or other transaction), a price equal to the aggregate Market
Price (as defined in subsection 11.5.7 hereof) for all Shares that
were deemed Excess Shares on the date of the purported transfer that
resulted in the Excess Shares. No interest in a trust may be
transferred unless the Initial Transferee of such interest has given
advance written notice to the Trust of the designation of the
Subsequent Transferee. Upon the transfer of an interest in a trust in
compliance with this subsection 11.5.6, the corresponding Excess
Shares that are represented by the transferred interest in the trust
shall be automatically deemed an equal
4
<PAGE> 5
number of Shares of the same class and series from which the
corresponding Excess Shares were originally created, such Shares shall
be transferred of record to the Subsequent Transferee, and the
interest in the trust representing such Excess Shares shall
automatically terminate.
11.5.7 Trust's Redemption Right. All Excess Shares shall be
deemed to have been offered by the Initial Transferee for sale to the
Trust, or its designee, at a price per Share equal to the lesser of
(a) the price per Share in the transaction that created such Excess
Shares (or, in the case of devise or gift, the Market Price per Share
at the time of such devise or gift) or (b) the Market Price per Share
of the class of Shares for which such Excess Shares was created on the
date the Trust or its designee, accepts such offer. The Trust shall
have the right to accept such offer for a period ending on the earlier
of (i) ninety (90) days after (a) the date of the purported transfer
that resulted in such Excess Shares if the Initial Transferee notified
the Trust of such purported transfer within ten (10) days thereof or
(b) the date on which the Trust Managers determine in good faith that
the purported transfer resulting in Excess Shares occurred if the
Trust was not notified of the purported transfer by the Initial
Transferee and (ii) the date on which the Initial Transferee gives
notice of its intent to transfer its trust interest to a Subsequent
Transferee. For purposes of this Article XI, "Market Price" means for
any Share, the average daily per Share closing sales price of a Share
if such Shares are listed on a national securities exchange or quoted
on the National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ NMS"), and if such Shares are not so
listed or quoted, the Market Price shall be the mean between the
average per Share closing bid prices and the average per Share closing
asked prices, in each case during the 30 calendar day period ending on
the business day prior to the redemption date, or if there have been
no sales on a national securities exchange or on the NASDAQ NMS and no
published bid and asked quotations with respect to such Shares during
such 30 calendar day period, the Market Price shall be the price
determined by the Trust Managers in good faith. Payment of all of the
amount determined as the redemption payment for Shares redeemed in
accordance with this subsection 11.5.7 shall be made within 30 days of
the date on which the Trust shall have notified the Initial Transferee
in writing of the Trust's intent to exercise its redemption rights.
No interest shall accrue on any redemption payment with respect to the
period subsequent to the redemption date to the date of the redemption
payment. Notwithstanding anything in this subsection 11.5.7 to the
contrary, the Trust's redemption rights with respect to any Excess
Shares shall terminate upon any transfer of the trust interest
relating thereto to a Subsequent Transferee.
11.6 Exceptions to Certain Ownership and Transfer Limitations. The
Ownership Limit set forth in Section 11.2 hereof shall not apply to the
following Shares and such Shares shall not be deemed to be Excess Shares at the
times and subject to the terms and conditions set forth in this Section 11.6:
5
<PAGE> 6
11.6.1 Exemption by Trust Managers. Subject to the
provisions of Section 11.7 hereof, Shares which the Trust Managers in
their sole discretion may exempt from the Ownership Limit while owned
by a person who has provided the Trust with evidence and assurances
acceptable to the Trust Managers that the qualification of the Trust
as a REIT would not be jeopardized thereby.
11.6.2 Shares Held by Underwriters. Subject to the
provisions of Section 11.7 hereof, Shares acquired and held by an
underwriter in a public offering of Shares, or in any transaction
involving the issuance of Shares by the Trust in which the Trust
Managers determine that the underwriter or other person or party
initially acquiring such Shares will make a timely distribution of
such Shares to or among other holders such that, at all times prior to
and following such distribution, the Trust will continue to be in
compliance with the REIT Provisions.
11.7 Authority to Revoke Exceptions to Limitations. The Trust
Managers, in their sole discretion, may at any time revoke any exception
pursuant to subsection 11.6.1 or 11.6.2 hereof in the case of any Shareholder,
and upon such revocation, the provisions of Sections 11.2 and 11.5 hereof shall
immediately become applicable to such Shareholder and all Shares of which such
Shareholder may be the beneficial owner. A decision to exempt or refuse to
exempt from the Ownership Limit the ownership of certain designated Shares, or
to revoke an exemption previously granted, shall be made by the Trust Managers
in their sole discretion, based on any reason whatsoever, including, but not
limited to, the preservation of the Trust's qualification as a REIT.
11.8 Severability. If any provision of this Article XI or any
application of any such provision is determined to be invalid by any federal or
state court having jurisdiction, the validity of the remaining provisions of
this Article XI shall not be affected and other applications of such provision
shall be affected only to the extent necessary to comply with the determination
of such court. To the extent this Article XI may be inconsistent with any other
provision of these By-Laws, this Article XI shall be controlling.
11.9 Authority of the Trust Managers. Subject to Section 11.10
hereof, nothing contained in this Article XI or in any other provisions of
these By-Laws shall limit the authority of the Trust Managers to take such
action as they deem necessary or advisable to protect the Trust and the
interests of the Shareholders by preservation of the Trust's qualification as a
REIT under the REIT Provisions, provided that no such action may be taken to
amend or delete Section 11.10 hereof. In applying the provisions of this
Article IX, the Trust Managers may take into account the lack of certainty in
the REIT Provisions relating to the ownership of Shares that may prevent a
corporation from qualifying as a REIT and may make interpretations concerning
the Ownership Limit, Excess Shares, beneficial ownership and related matters as
conservatively as the Trust Managers deem advisable to minimize or eliminate
uncertainty as to the Trust's continued qualification as a REIT.
Notwithstanding any other provisions of these By-Laws, if the Trust Managers
determine that it is no longer in the best interests of the Trust and the
6
<PAGE> 7
Shareholders to continue to have the Trust qualify as a REIT, the Trust
Managers may revoke or otherwise terminate the Trust's REIT election pursuant
to Section 856(g) of the Code.
11.10 New York Shares Exchange. Nothing in this Article XI shall
preclude the settlement of any transaction entered into through the facilities
of the New York Shares Exchange.
7
<PAGE> 8
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN INDUSTRIAL PROPERTIES REIT
/s/CHARLES W. WOLCOTT
Charles W. Wolcott,
President and Chief Executive Officer
DATE: February 15, 1994
8
